LAKE ELSINORE: Council set to approve $24 million budget

The biggest changes in the city's operating budget for the
coming fiscal year may not be in the numbers as much as in the
names of a couple of important reserve funds.

City Council members are scheduled Tuesday to approve an
operating budget that, in contrast to recent years, projects a
slight increase in revenue and spending, with no major cuts, for
the year starting July 1.

Meanwhile, the city's financial staff recommends the council
change the name of the fund reserved for emergencies to
"catastrophic reserve." The city expects to maintain that reserve
at $3.64 million, amounting to about 15 percent of general fund
expenditures.

Also, the city has a supplementary reserve informally called the
rainy day fund. Officials recommend relabeling it as the "budget
stabilization reserve" to more accurately reflect its role in
helping the city to plug holes. That reserve is projected at $2.15
million.

In total, the city anticipates receiving $24.36 million in
general fund revenue for the 2011-12 fiscal year, about $50,000
more than the city is expected to have received in the year ending
Thursday.

For the first time in several years, the city forecasts spending
less in the coming year from the general fund ---- $24.27 million
---- than it will take in from revenue.

Going into the 2010-11 budget cycle, the city expected to spend
a little more than $24 million and receive just $23.1 million in
revenue.

However, midyear revisions indicated the city would wind up with
about $24.3 million in revenue primarily because of unexpected
increases in sales and property tax revenues.

"Compared to where we were last year, there's not a whole lot of
change," said Mayor Amy Bhutta. "Definitely, sales tax is up and
property tax is looking like it's on the upswing. I think those are
positive indicators that hopefully we've seen the worst and it's
going to move up from here."

The city ended fiscal year 2009-10 having spent $23.9 million
from the general fund, compared to $22.4 million in revenue.

The general fund is the budget on which the city relies for
day-to-day expenditures.

The 2011-12 budget numbers could change somewhat in the near
future because negotiations are continuing with the employees union
for a contract to replace the one that expires Thursday.

Tuesday's regular City Council meeting is scheduled to start at
7 p.m. in the Lake Elsinore Cultural Center, 183 N. Main St.,
following a study session to discuss the agenda at 4 p.m., and a
closed-door session to discuss legal issues at 5 p.m.